Tax Credits - Is this right?

alwaysonthego_2

sassygirl wrote: »

I am sure they are underpaying me. My children are 5 months, 5 yrs and 10 yrs. I get no WTC as they said hubbies wages were too much. I cant understand the system at all to be honest and im just grateful for anything i get. Maybe it may be because he works 42 hours??

what is your dh's income?

sassygirl_2

alwaysonthego wrote: »

what is your dh's income?

£17900
My income for 2008/09 is £200 as been on mat leave, plus was signed off sick in may 08 for a month, but received no IB or SSP, nor did my CTC go up.

My income for 09/10 is nil and OH is the same as before

[Deleted User]

Ex-Spendaholic wrote: »

Thanks everyone.

Subsonicoyote, we haven't had tax credits before so shouldn't have an overpayment as such.

What do you mean by an income increase? I'm a bit confused on that as our income will go down following the redundancy.

BTW, kids are 10, 6 and 16 months should that make any difference.

Sorry, ignore the parts about income increases. This would only be applicable if you already had a claim in payment.

TotallyBroke

sassygirl your tax credits are being paid based on both your wages.
This year April 2009-April 2010 they will be based on your husbands wage and anything you earned in April 08-April 09. So will go up.

Francesanne

Ex-Spendaholic wrote: »

Just looking for some advice.

My OH is likely to be made redundant in the next few months. If so he will get a redundancy package of circa £60K (so that is good). :j We have 3 kids and I work 22 hours per week earning £18,500. I just looked on entitledto.com to see if we could claim any sort of tax credit (expecting the answer to be no).

However, having using the details from my payslip the website has told me we will be entitled to £7391.01 per year (£141.75 per week). I'm really surprised at this. As a result of the redundancy payment, we will be mortgage free (which is also good) :dance: There doesn't seem to be anywhere on the website or the IR website to declare savings (which we will have after the redundancy payment)

2 of the kids are at school and the 3rd is looked after by grandparents so there are no childcare costs.

Does this figure seem right? With the whole debacle of errors and overpayments etc I would almost be frightened to claim in case we end up in this situation. I appreciate that we are in a really good position in that we will come out the other end of job loss both mortgage free and with savings so I'm surprised that we will get help.

Any advice would be greatly appreciated.

£7,391.01£141.75 weekly

Don't forget your OH will have to pax tax on his redundancy payment. The first £30,000 use to be tax free but that amount might have been increased by now. Have no idea about tax credits however but does sound very generous.

sassygirl_2

TotallyBroke wrote: »

sassygirl your tax credits are being paid based on both your wages.
This year April 2009-April 2010 they will be based on your husbands wage and anything you earned in April 08-April 09. So will go up.

ahhh right, so at the mo, they are based on 07/08 wages for both of us i guess which will explain a lot as i was earning that year. so when it comes to april they will base it on 08/09 wages is that right? Thankyou and sorry to OP for crashing on her thread

TotallyBroke

Yes sassygirl that is correct. At the end of April you should both get p60's from your employers. Then when you get the renewal forms you will fill them out using the details from the p60. Then they will base your tax credits in July from those figures. You will be paid the old amount from April to July, they do this so they still pay you something until they get the new figures through. So you will get the new amount until July 2010. If you go back to work between now and July next year you will have to tell them. If you don't and wait until the renewal pack comes through you will get an overpayment that will need paying back.

flea72

few pointers - interest earned on savings is classed as income, so this would have to be declared, but with interest rates being so low, this prob wouldnt make any difference

I take it your OH is going to sign on, so he maintains NI contributions. If so, then using any redundancy to pay off a mortgage is classed as deprivation of income and is a big no-no

However based on your income, you would be entitled to roughly £6k a year CTC

Flea

Voyager2002

flea72 wrote: »

few pointers - interest earned on savings is classed as income, so this would have to be declared, but with interest rates being so low, this prob wouldnt make any difference

I take it your OH is going to sign on, so he maintains NI contributions. If so, then using any redundancy to pay off a mortgage is classed as deprivation of income and is a big no-no

However based on your income, you would be entitled to roughly £6k a year CTC

Flea

I question the second paragraph. Yes, of course he (OH) should sign on when unemployed, and so will receive NI contributions and for the first six months contributions-based JSA. If he is still unemployed after six months, he might be able to claim income-based JSA. However, if the family has savings of more than 15,000 pounds there will be no income-based JSA until the surplus savings have been spent. And if he has got rid of the savings in order to qualify for benefit, then he may be treated as if he still had the savings and so still not get any benefit. That is what is meant by the 'deprivation of capital' rule: it is not a criminal matter, but means that if you fritter away his redundancy package you might later be unable to claim means-tested benefits. It is far from clear whether using it to pay off the mortgage would cause this problem: if this is an issue for you, seek expert advice.

flea72

Voyager2002 wrote: »

I question the second paragraph. Yes, of course he (OH) should sign on when unemployed, and so will receive NI contributions and for the first six months contributions-based JSA. If he is still unemployed after six months, he might be able to claim income-based JSA. However, if the family has savings of more than 15,000 pounds there will be no income-based JSA until the surplus savings have been spent. And if he has got rid of the savings in order to qualify for benefit, then he may be treated as if he still had the savings and so still not get any benefit. That is what is meant by the 'deprivation of capital' rule: it is not a criminal matter, but means that if you fritter away his redundancy package you might later be unable to claim means-tested benefits. It is far from clear whether using it to pay off the mortgage would cause this problem: if this is an issue for you, seek expert advice.

did i say it was a criminal matter? But when most people get redundancy, their first thought is to pay off the mortgage as they see it as their biggest expense, and also they want to maintain the roof over their head. They dont consider the consequences of doing so, where benefits are concerned

Paying off a mortgage with redundancy, is classed as deprivation of capital, as redundancy pay is supposed to be money to tide you over until you find other employment, not used for buying a house. You can use the redundancy money to meet your monthly mortgage payments, but if you use it as a lump sum to reduce the capital, then the benefits office, take a dim view of it

I just wanted to warn the OP, so they could consider their options. With redundancy there are so many things going on at once, and your life is practically thrown up in the air, that sometimes you dont think of the bigger picture

Flea